Originations by NBFCs grew 35% in the third quarter.
FinTech BizNews Service
Mumbai, 9 January 2026: Securitization volumes continued their steady momentum in the first nine months of this fiscal, growing by 5% on-year to Rs 1.87 lakh crore, compared to Rs 1.78 lakh crore in the same period last fiscal largely supported by sustained originations by non-banking financial companies (NBFCs2), despite limited originations by banks.
Volumes for third quarter stood at Rs 63,000 crore, broadly in line with issuances seen in the corresponding quarter of fiscal 2025. Notably, while Banks had contributed meaningfully to securitisation volumes in third quarter of last fiscal, their share were negligible this fiscal. This was offset by increased activity from NBFCs.
Originations by NBFCs posted a strong on-year growth of 35% for the third quarter alone driven by strong volumes in both gold and vehicle loan pools. This has resulted in a shift in the originator mix this quarter with NBFCs accounting for 97% of the overall retail volumes, as compared to 71% for the corresponding period last year.
The market also witnessed a broadening of the originator base. In the first nine months of this fiscal, total number of originators was 200 as compared to 150 in the corresponding period last fiscal, mostly NBFCs.
Says Aparna Kirubakaran, Director, Crisil Ratings, “The strong growth in originations by NBFCs was driven by large volumes in securitizations of gold loans and vehicle loans. This along with an increase in the base of originators carrying out securitizations, has supported market activity. On the demand side, market also benefited from priority sector loan (PSL) demand as banks faced challenges in meeting their PSL targets and resolved them by investing in securitizations.”
Pass-through certificate (PTC) transactions continue to dominate the volumes in the nine-month period. PTCs’ share rose to 62% of the overall volumes (Chart 3 in annexure), which also includes 2 large deals from non-financial sector entities.
Direct Assignment (DA) share picked up this quarter, driven by a surge in the sell-down of gold and microfinance loan pools. Additionally, as the new co-lending guidelines4 have increased operational complexities, it has prompted some originators to shift away from co-lending transactions. This trend is likely to drive a sustained growth in DA volumes over the near to medium term.
Among retail asset classes, gold loan securitization experienced a significant uptick in volumes, rising to 12% of the market volume over the nine-month period, a substantial increase from just 1% during the same period last year. However, the market was largely dominated by a single leading originator, which drove the majority of the volumes.
The share of vehicle loans (including those of commercial vehicles and two-wheelers) dropped marginally to 43% from 48% in the same period last fiscal. However, NBFC originated vehicle pools showed a growth of 14% in nine-months, driven by increased issuance from regular players and new originators transacting in large volumes. On the other hand, share of mortgage-backed securitisation declined to ~ 17% from 23% in the corresponding period of last fiscal due to subdued activity by a large private bank which had done large volumes last fiscal.
MFI sector has maintained a steady share of 12% of the total volume over the nine-month period. This represents a modest increase from 11% in the same period last year, despite the sector experiencing stress that impacted disbursements. Also, we saw foreign banks eyeing investments in the microfinance (MFI) space through the PTC channel to meet their priority-sector-lending requirements.
The share of personal loans and business loans reduced marginally to -15% (vs ~16%) in nine months as investors have been cautious towards unsecured asset classes and micro loans against properties on account of asset quality concerns.
Banks continue to dominate the investor segment. At the same time, healthy performance of securitized pools, has also led investment activity in PTCs from investors such as mutual funds.
Going forward, we expect volumes in fiscal 2026 to remain steady as NBFCs continue to raise funds via securitization route. Furthermore, with the credit-deposit ratio showing a marginal increase for most banks, we can expect some increase in bank-led originations in the market.
